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Buy Rating on Zoom Affirmed Amidst Microsoft Teams’ Unbundling Strategy – TipRanks Financial Blog

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Analyst Siti Panigrahi from Mizuho Securities maintained a Buy rating on Zoom Video Communications (ZMResearch Report) and keeping the price target at $90.00.

Siti Panigrahi has given his Buy rating due to a combination of factors surrounding the competitive dynamics in the unified communications as a service (UCaaS) market. The key driver behind Panigrahi’s optimistic view is the recent announcement that Microsoft will be unbundling Teams from Office globally. This strategic shift is likely to be beneficial for Zoom Video Communications, as Microsoft Teams has been a significant competitive threat due to its bundling with Office 365, making it an appealing package for enterprises looking for collaboration tools.
The unbundling is expected to alleviate some of the churn that Zoom has been facing, as enterprises may now consider Zoom’s offerings more seriously, given its perceived superiority in terms of features and capabilities. Moreover, Zoom’s integration of Zoom AI Companion, which is free with all paid subscriptions, may further distinguish it from Microsoft’s equivalent, which is a paid feature. This could not only enhance Zoom’s value proposition but also potentially increase the conversion of free users to paid subscribers, underpinning the Buy rating on Zoom’s stock.

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Zoom Video Communications (ZM) Company Description:

Founded in 2011, Zoom Video Communications, Inc. is a cloud-based peer-to-peer software platform that connects people through videotelephony and online chat services. Its video-first communications platform is used for teleconferencing, telecommuting, distance education, and social relations.

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